Renovations are underway at 9 West Broad Street in Stamford, Conn.,...

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RHYS Senior Associate Matt Torrance, left, and Senior Vice President and Principal Christian Bangert, right, give a tour of the renovations taking place at 9 West Broad Street in Stamford, Conn., on Tuesday, July 15, 2014.

The Fairfield County office market followed up a strong first quarter with a mixed bag of results during the second quarter, with the Greenwich submarket faring slightly better than the region.

The Greenwich office of Newmark Grubb Knight Frank reported that in the second quarter the total availability rate for Class A and Class B office space in Greenwich was 22.7 percent, compared with 23.5 percent for the county.

The Greenwich availability rate was 22.5 percent in the previous quarter.

Across the county, the availability rate decreased slightly from 23.6 percent in the first quarter, according to the firm, which reported that Stamford has an availability rate of 28.6 percent.

Other submarket rates are central Fairfield County, 22.3 percent; eastern Fairfield County, 16.8 percent; and northern Fairfield County, 24 percent.

The availability rate typically represents space that will be available in a market within the next 12 months.

Least availability

Of all the regions, Greenwich has the smallest inventory with 4.4 million square feet, while Stamford has the largest at 14.7 million, according to Newmark Grubb Knight Frank.

Despite large blocks of space coming off the market in the second quarter, major blocks of space were added in the same period, preventing the availability rate from showing further improvement, according to the firm.

But there are some signs of improvement in Greenwich, according to Stephen Banker, executive managing director at the local office of Newmark Grubb Knight Frank.

"We're seeing some nice activity from Manhattan with small hedge funds," said Banker, who is representing 1 Fawcett Place in downtown Greenwich. "But leasing activity in western Greenwich has been static."

On the positive side, Fifth Street Finance, which bought 777 W. Putnam Ave. from Gateway Park Associates in 2013 for $38.85 million, moved into the 126,000-square-foot complex this month, Banker said.

West Side upgrades

Owners of office buildings on the west side of Greenwich have been upgrading their properties to attract tenants and compete better in the market, Banker said.

One of those properties is Greenwich Office Park, a nine-building, 425,000-square-foot complex on 23 acres.

The property underwent a $13 million retrofit to attract financial services firms, said David Block, senior vice president at the Stamford office of CBRE and leasing agent for Greenwich Office Park.

Asset manager Clarion Partners has positioned the property well for potential tenants, he said.

"We'll see deals get done in western Greenwich, as well as the CBD (Central Business District)," he said. "Before the end of the third quarter, we'll see an uptick in leasing activity. I'm a strong believer that it's only a matter of time before it picks up in Greenwich."

Private equity firms, financial services firms and hedge funds have long been a staple of the Greenwich office market and economy, Block said, and are returning after the recession.

"They are willing to pay a lot in rent, but they expect a lot," he said, adding rents typically are $50 per square foot or more, depending on location.

Financial firms expand

In central Greenwich, landlords are seeing financial-services tenants expand their operations, Banker said, adding AQR and JD Capital expanded at Greenwich Plaza. "600 Steamboat is seeing a pickup in interest, and Pickwick Plaza is ready to commence a major renovation. Ivy Equity is ready to start renovations at 41 W. Putnam," he said, "and improvements are taking place at 2 Soundview."

"There's a trend toward taking a building where a larger tenant has moved out, and the space gets broken up," Banker said. "We're seeing some activity from New York City, as well as some new private equity and hedge fund groups that have formed."